BMW Group reports eighth successive record year despite high
upfront expenditure
- Sales volume, earnings and revenues reach new record levels in 2017
- Pre-tax profit above €10 billion for first time
- Additional €1 billion euros allocated on R&D
- EBIT margin within target range
- Dividend at record level
Munich. The BMW Group once again demonstrated its
ability to generate sustained profitability in 2017, posting its
eighth successive record year. Despite a significant increase in
upfront expenditure for future mobility the company reported its best
ever figures to date for sales volume, revenues and earnings. In
addition, the BMW Group delivered more than 100,000 electrified
vehicles to customers for the first time in a single year, firmly
underpinning the Group’s role as a pioneer and key driver of electric
mobility. In line with its Strategy NUMBER ONE >
NEXT, the BMW Group continues to play a leading role in
transforming the mobility sector with its future-oriented ACES
programme: Automated, Connected,
Electrified and Services.
« We can look back on the most successful year in our corporate
history and have achieved record levels for revenues and earnings for
the eighth year in succession, » stated Harald
Krüger, Chairman of the Board of Management of BMW AG in
Munich on Thursday. « Since 2016, we have taken numerous strategic
decisions to further grow our business on a sustainable basis in the
years ahead. »
New sales volume, revenues and earnings records in 2017
Automotive sales volume increased by 4.1% to a new
record level of 2,463,526 units in 2017 (2016: 2,367,603 units). With
its three premium automotive brands, BMW, MINI and Rolls-Royce, the
BMW Group asserted its position as the world’s leading manufacturer of
premium vehicles. Deliveries of electrified vehicles
jumped by 65.6% to 103,080 units, driven by the all-electric
BMW i3 sales which have risen every year since the model’s market
launch in 2013. The BMW Group intends to increase the sales volume of
electrified vehicles to at least 140,000 units in 2018 and bring more
than half a million electrified vehicles onto the roads by the end of 2019.
Group revenues rose to a new record level of € 98,678
million in 2017 (2016: € 94,163 million; +4.8%), with currency effects
slightly restraining growth. Profit before financial result
(EBIT) rose by 5.3% to € 9,880 million (2016: € 9,386
million). Group profit before tax (EBT) went up
significantly year-on-year, partly helped by favourable valuation
effects, and – thanks to a 10.2% rise to € 10,655 million (2016: €
9,665 million) – finished the year for the first time above the
ten-billion-euro mark. As in the previous year, all three operating
segments – Automotive, Motorcycles and Financial Services – reported
record pre-tax earnings, each making a contribution to earnings growth
in 2017. The pre-tax return on sales (EBT margin) for
the Group improved to 10.8% (2016: 10.3%), ensuring that the BMW Group
remains one of the automobile industry’s leaders when it comes to profitability.
Income tax expense amounted to € 1,949 million in the
year under report (2016: € 2,755 million). The significantly lower tax
expense in 2017 was mainly due to the reduction in the US federal
corporate income tax rate from 35% to 21% with effect from 1 January
2018, which was taken into account in the measurement of deferred
taxes at 31 December 2017. The revaluation gave rise to a positive
impact of € 977 million on deferred taxes recognised through the
income statement. Group net profit benefitted
accordingly and rose to € 8,706 million (2016: € 6,910 million; +26.0%).
Nicolas Peter, Member of the Board of Management of
BMW AG responsible for Finance, stated: « Last year we allocated
around one billion euros more on research and development than in 2016
– and nevertheless increased our operating profit. This is what we
mean by sustained profitability. » In 2017, the BMW Group raised
research and development expenditure by 18.3% to € 6,108 million
(2016: € 5,164 million). Expressed as a percentage of revenues, the
research and development expenditure ratio at Group level rose to 6.2%
(2016: 5.5%).
« In 2018, we expect the ratio to reach its highest level to
date, with expenditure again rising by a further high three-digit
million euro amount year-on-year. We need to earn these additional
outlays by working with the utmost efficiency on the performance side
while also maintaining a keen focus on the expenses side, »
commented Peter.
Dividend of € 4.00 per share of common stock proposed
« A company is only as good as its workforce. With their
exemplary dedication, our employees are the driving force behind our
success story, » stated Harald Krüger. « That
is why, we pay our permanent staff in Germany the highest profit share
in the sector. » At the Annual General Meeting on 17 May 2018, the
Board of Management and the Supervisory Board will propose to
shareholders that the dividend be increased to a new
high of € 4.00 (2016: € 3.50) per share of common stock and € 4.02
(2016: € 3.52) per share of preferred stock. The distribution
rate of 30.2% (2016: 33.3%) will be within the BMW Group’s
target range of between 30 and 40%. « The proposal to raise the
dividend by a significant amount is a clear sign of the BMW Group’s
confidence that it is ideally placed to perform well in the future on
a sustainable basis, » said Krüger.
Consistently high profitability in Automotive segment
Automotive segment revenues grew by 2.5% to € 88,581
million (2016: € 86,424 million) on the back of positive sales volume
figures. EBIT improved slightly by 2.2% to € 7,863
million (2016: € 7,695 million).
EBIT margin came in at 8.9%, unchanged from the
previous year, thus finishing within the target range of between 8 and
10% or higher for the eighth financial year in a row since 2010.
Segment profit before tax increased by 9.8% to set
a new record of € 8,691 million (2016: € 7,916 million).
In 2017, the Group again delivered over two million BMW
brand vehicles to customers. Sales volume rose by 4.2% to
2,088,283 units year-on-year (2016: 2,003,359 units). The BMW
X family remained a significant growth driver, with 9.6%
more vehicles delivered to customers – an excellent performance
considering the BMW X3 model change has been in
progress since the second half of the year. Following the completion
of the BMW 5 Series Sedan model change, December
sales of the world’s leading premium business sedan were more than 55%
up on the previous year, while sales volume for the year as a whole
grew by 6.3% to 291,856 units. Other models contributing to growth in
2017 included the BMW 1 Series (201,968 units;
+14.7%) and the brand’s flagship BMW 7 Series (64,311
units; +4.5%).
The MINI brand set a new sales volume record in 2017
with 371,881 deliveries worldwide and 3.2% year-on-year growth. Sales
of the new MINI Countryman jumped by 30.0% (84,441
units). The MINI Convertible also made an important
contribution to the brand’s successful performance, recording sales
volume growth of 12.0% (33,317 units).
Rolls-Royce Motor Cars delivered 3,362 units (-16.2%)
to customers in almost 50 countries around the globe. The figure was
achieved despite volatility in key Middle East markets and the Phantom
being unavailable throughout the year due to model change. The new
Phantom was unveiled to the acclaim of an international public in
London in July and has already received a large number of pre-orders.
First customer deliveries commenced at the beginning of this year.
The BMW Group remains committed to its strategy of achieving a
balanced distribution of sales worldwide.
The BMW Group again recorded high growth in Asia,
where a total of 848,826 BMW, MINI and Rolls-Royce brand
vehicles were sold, representing double-digit growth of 13.6% (2016:
747,291 units). The Chinese market made a key contribution to this
performance with 595,020 units delivered to customers (2016: 516,785
units; +15.1%).
In Europe, the BMW Group sold a total of 1,101,760
units across its three brands, thus remaining at the previous year’s
high level (2016: 1,092,155 units; +0.9%). The sales volume figure of
241,674 units for Great Britain was down on the previous year (2016:
252,205 units; -4.2%). Deliveries to customers in France increased to
89,957 units (2016: 84,305 / +6.7%). The sales volume also increased
in Italy with 86,663 deliveries (2016: 83,765 / +3.5%).
The Americas region saw a slight decrease in the
number of deliveries over the year as a whole (451,136 units; -2.0%),
with the limited availability of BMW X models having an impact on
volumes. In a highly competitive market environment, deliveries in the
USA dipped slightly to 353,819 units (2016: 366,493 units; -3.5%). In
the fourth quarter of 2017, however, a turnaround was perceptible in
both the USA (98,137 units; 2016: 96,609 units; +1.6%) and in the
Americas as a whole (124,547 units; 2016:122,393 units; +1.8%).
Motorcycles segment deliveries surpass 150,000 units for the first time
2017 was also a record-breaking year for the Motorcycles
segment. Motorcycle and maxi-scooter deliveries rose by 13.2%
to 164,153 units (2016: 145,032 units), making it the seventh
consecutive record-breaking year and the first in which more than
150,000 units were sold. Segment revenues also rose
significantly to € 2,283 million (2016: € 2,069 million; +10.3%).
Similarly, EBIT improved to € 207 million (2016: €
187 million; +10.7%). As in the Automotive segment, the BMW Group is
also targeting an EBIT margin within a range of 8 to
10% in the Motorcycles segment. In the financial year 2017, the margin
came in at 9.1% (2016: 9.0%). Profit before tax
increased by 10.8% to € 205 million (2016: € 185 million).
Financial Services segment continues to break records
The Financial Services segment also continued to perform well in
2017. The number of new contracts concluded with
retail customers rose slightly to 1,828,604 contracts (2016: 1,811,157
contracts; +1.0%) during the twelve-month period. At 31 December 2017,
the contract portfolio comprised 5,380,785 contracts,
thus growing by 5.2% year-on-year (2016: 5,114,906 contracts).
Segment revenues were 7.3% higher at € 27,567
million (2016: € 25,681 million). Profit before tax
increased slightly to € 2,207 million (2016: € 2,166 million; +1.9%).
Increase in workforce and number of apprentices
The size of the workforce grew by 4.2% in 2017. At
31 December, the BMW Group employed 129,932 people worldwide (2016:
124,729 employees). Projects relating to vehicle electrification and
autonomous driving played a major role in the additional recruitment.
Growth in automotive and motorcycle business on the one hand and the
expansion of financial and mobility services on the other also
contributed to the rise. The BMW Group continues to place great
emphasis on its trainee programme and has again invested some € 350
million in basic and further training. Overall, more than 4,750 young
people worldwide were employed in vocational training
and training programmes for young talent at 31 December 2017.
BMW Group targets further volume growth in 2018
With its highly attractive model range, the BMW Group expects
worldwide deliveries of its vehicles to rise in 2018.
The increasing availability of the new BMW X3 and the launch of
appealing new products such as the BMW Z4 or the BMW 8 Series are
likely to provide additional momentum. « This year we are
targeting another new sales record, with deliveries slightly up on the
previous year », Krüger stated. At the same time,
the BMW Group expects the political and economic environment to remain volatile.
Supervisory Board
At the Annual General Meeting to be held on 17 May 2018, the
Supervisory Board will propose that Prof. Dr. Reinhard Hüttl, Chairman
of the Executive Board of Helmholtz-Centre Potsdam – GFZ German
Research Centre for Geosciences, Dr. Karl-Ludwig Kley, Chairman of the
Supervisory Board of E.ON SE and Deutsche Lufthansa AG and Prof. Dr.
Renate Köcher, Director of Institut für Demoskopie Allensbach
Gesellschaft zum Studium der öffentlichen Meinung mbH, be re-elected
to the BMW AG Supervisory Board.
Furthermore, the Supervisory Board will propose to the shareholders
that Dr. Kurt Bock, Chairman of the Board of Executive Directors of
BASF SE, be elected to the Supervisory Board of BMW AG. In agreement
with the Supervisory Board, Dr. h.c. Robert Lane will resign effective
the end of the Annual General Meeting. The Supervisory Board would
like to thank Dr. h.c. Lane for several years of invaluable and
trusted cooperation.
* * *
Further information on the Group Financial Statements 2017 and the
outlook for the current year will be available at the BMW Group’s
Annual Accounts Press Conference to be held in Munich on 21 March 2018.
|
The BMW Group – an Overview |
2017 |
2016 |
Change in % |
||||
|
Deliveries to customers |
|||||||
|
Automotive |
units |
2,463,526 |
2,367,603 |
4.1 |
|||
|
thereof: |
units |
2,088,283 |
2,003,359 |
4.2 |
|||
|
MINI |
units |
371,881 |
360,233 |
3.2 |
|||
|
Rolls-Royce |
units |
3,362 |
4,011 |
-16.2 |
|||
|
Motorcycles |
units |
164,153 |
145,032 |
13.2 |
|||
|
Workforce1 |
129,932 |
124,729 |
4.2 |
||||
|
Automotive segment EBIT |
% |
8.9 |
8.9 |
– |
|||
|
Motorcycles segment |
% |
9.1 |
9.0 |
+0.1 % points |
|||
|
EBT margin BMW Group |
% |
10.8 |
10.3 |
+0.5 % points |
|||
|
Revenues |
€ million |
98,678 |
94,163 |
4.8 |
|||
|
thereof: |
€ million |
88,581 |
86,424 |
2.5 |
|||
|
Motorcycles |
€ |
2,283 |
2,069 |
10.3 |
|||
|
Financial |
€ million |
27,567 |
25,681 |
7.3 |
|||
|
Other |
€ million |
7 |
6 |
16.7 |
|||
|
Eliminations |
€ million |
-19,760 |
-20,017 |
1.3 |
|||
|
Profit before financial result (EBIT) |
€ million |
9,880 |
9,386 |
5.3 |
|||
|
thereof: |
€ million |
7,863 |
7,695 |
2.2 |
|||
|
Motorcycles |
€ |
207 |
187 |
10.7 |
|||
|
Financial |
€ million |
2,194 |
2,184 |
0.5 |
|||
|
Other |
€ million |
14 |
-17 |
– |
|||
|
Eliminations |
€ million |
-398 |
-663 |
40.0 |
|||
|
Profit before tax (EBT) |
€ |
10,655 |
9,665 |
10.2 |
|||
|
thereof: |
€ million |
8,691 |
7,916 |
9.8 |
|||
|
Motorcycles |
€ |
205 |
185 |
10.8 |
|||
|
Financial |
€ million |
2,207 |
2,166 |
1.9 |
|||
|
Other |
€ million |
80 |
170 |
-52.9 |
|||
|
Eliminations |
€ million |
-528 |
-772 |
31.6 |
|||
|
Income taxes |
€ million |
-1,949 |
-2,755 |
29.3 |
|||
|
Net profit |
€ million |
8,706 |
6,910 |
26.0 |
|||
|
Earnings per share2 |
€ |
13.12/13.14 |
10.45/10.47 |
25.6/25.5 |
|||
For questions please contact:
Corporate Communications
Max-Morten Borgmann, Business and Finance Communications
Telephone: +49 89 382-24118, fax: +49 89 382-24418
Glenn Schmidt, Head of Business and Finance Communications
Telephone: +49 89 382-24544, fax: +49 89 382-24418
